5 Common First-time Home Buyer Mistakes: What They Are and How to Avoid Them

Categories: Resources & Tips

As a first-time home buyer, it’s easy to let the excitement of owning your own space cloud your vision when it comes to focusing on formalities and practicalities. As you tour potential homes, you may find yourself dreaming of wall colors and accent rugs rather than mortgage qualification or neighborhood crime rates. Many first-time buyers find themselves unintentionally making some pretty large mistakes, all of which are completely avoidable. This article will help you, as a first-time buyer, become aware of common mistakes other buyers have made and help you avoid making them yourself on the road to owning your first home.

First-time homebuyer advice

Mistake 1: Skipping Mortgage Qualification
As a first-time buyer, it is likely you are planning to use financing options to pay for your home in the form of a mortgage. It is important to keep in mind that what you think you will qualify for and what a bank is willing to lend to you may be entirely different. A common mistake first-time buyers make is neglecting to get pre-approved for a home loan before choosing the home of their dreams. Doing so can result in a buyer not qualifying for a loan large enough to pay for the home and a waste of the seller’s and their own time.

How to Avoid it:
Meet with potential lenders and have them run your credit and financial background to see what dollar amount they are willing to lend before you even visit your first potential home. Mortgage qualification and pre-approved loans will expedite your home buying experience by giving you a set monetary amount you have to work with. This way, you will not waste time looking at homes outside of your price range and can instead focus on more realistic options.

Mistake 2: Putting Price Before Practicality
The price may seem right, but is the house practical? As a first-time home buyer looking for a steal, you may be considering buying a “fixer-upper” home that needs a lot of work or is far from the area you originally intended to move, all for the sake of “saving money.” While on the surface this may seem like a good idea, it’s actually impractical and can result in you spending more money in the long run on home improvements and gas if you are facing a hefty daily commute.

How to Avoid it:
Ask yourself if the house is really practical in relation to the price before you even think about putting in an offer. Estimate the additional costs you think the house will bring and add it to the cost of the home. Take that figure and look at other houses at that price before making your decision. For example, you may find a $60,000 house in need of $20,000 worth of improvements. Before making your final decision, you could very well end up finding a house for $80,000 that is a far more practical investment.

Mistake 3: Not Researching the Neighborhood
When renting a home, people tend to be less concerned with the area they live in because they know it’s more than likely a temporary arrangement. If you rented in the past, you probably figured you could deal with noisy neighbors or the occasional crime because your lease was only six months to a year in length and then you would have the option to relocate if the area wasn’t working out. Home ownership, however, doesn’t work that way, and you can’t simply up and move when unfortunate things happen in your surroundings. The neighbors you have when you own a home will likely be your neighbors for years.

How to Avoid it:
Research the area as much as possible before the deal is sealed. Look into crime rates for the area and surrounding areas, speak with current residents as possible, look at what kind of features are nearby and base your decision off of that. You want an area that you will feel comfortable living in long-term, and you want to avoid any and all surprises about the neighborhood after moving in.

Mistake 4: Forgetting About Additional Expenses Involved in Home Buying
If you’ve rented before, you are more than likely used to having a team of maintenance workers at your disposal when your sink broke and an on-site dumpster to take care of your waste, all at no extra cost to you. When you own a home, those things go away. If something breaks, you will be footing the bill for someone to fix it. You may have a trash barrel, but you also have a new monthly bill to pay for those services. Home ownership is an ongoing investment, and many first-time buyers forget about these additional costs when looking at homes.

How to Avoid it:
Research common costs home owners face and reassess your budget. Make a list and estimate the monthly cost of each and analyze what you can spend on home monthly while also being able to afford these extras.

Mistake 5: Ignoring the Future
You may be single now, but you might not be forever. While a one bed, one bath house may provide all of the space you need in the present, add ten years and two kids to the equation and suddenly you’re looking at either an incredibly crowded house or going through the entire moving process all over again. Many first-time buyers stick themselves into the “now” mentality and completely disregard how quickly things can change in life.

How to Avoid it:
Look for a house you can grow into. This doesn’t mean you need to go all out and purchase an eight bedroom house with a four-car garage, but you should look for a house that fits your future goals. If you know you want children or more children in the future, buy a house that supports that plan.

Be Sociable, Share!
LGI Homes

2 Responses to “5 Common First-time Home Buyer Mistakes: What They Are and How to Avoid Them”

  1. Hidden Benefits of Home Ownership | LGI Homes Says:

    [...] you are looking into the possibility of purchasing your first home, you are probably looking at common benefits such as tax deductions and the pride of ownership that [...]

  2. 5 FAQs About Credit Scores & Homebuying | LGI Homes Says:

    [...] learning all about various aspects of homeownership (financial, legal, and practical) that can be overwhelming to a first-time homebuyer and homeowner. As part of our ongoing All About series, LGI Homes seeks to provide an easy-to-read [...]

Leave a Reply